What drives Saudis to invest in real estate in Turkey?
In the last few years, Saudis have rushed to buy property in Turkey and, have set some records in matters related to real estate investment in Turkey, and the reasons behind this turnout are due to many advantages that they’ve found in this country as property owners and investors
So, What kind of property in Turkey do the Saudis prefer the most, and what is the percentage of the purchase processes done by them, and what are the reasons that made them choose Turkey?
Property ownership by Saudis in Turkey...Records and numbers
The volume of trade exchange between Ankara and Riyadh exceeded 50 million US dollars during the last 10 years, and the number of Saudi companies investing in Turkey and interested in the real estate sector, exceeded 250 companies, supporting the process of buying a property in Turkey by the Saudis.
This growing activity of Saudi real estate companies within the Turkish territories has contributed to encouraging real estate investment in Turkey by Saudi businessmen and raising it to more than a quarter of the total investment volume.
That has helped the Saudis maintain their presence in the first ranks in the list of most nationalities buying a property in Turkey, where they occupied over the last years the second place after Iraq in terms of real estate ownership in Turkey by Arabs.
And looking at some statistics, we find that the percentage of property ownership by Saudis in Turkey increased between 2016 and early 2019 by more than 120% by purchasing more than a million square meters of different properties.
Some political events, such as the murder of Saudi journalist Jamal Khashoggi at the Saudi consulate’s headquarters in Istanbul, affected the purchasing trend, as the Saudis' ownership of property in Turkey witnessed a slight decline, but the matter did not prevent many Saudi investors from completing their plans for buying property in Istanbul or other cities.
The Saudis bought more than 1672 properties throughout Turkey during the first nine months of 2019, ranking fourth in the list of real estate sales to foreigners and second in the Arab world after Iraq, as mentioned earlier.
It is worth noting that ownership of property in Turkey by people from the Arab Gulf exceeded 30% of the total foreign ownership, and Saudi Arabia had the lion's share among the Arab Gulf states for several reasons, which we detailed in the paragraph below.
What are the reasons behind the big turnout by Saudis to buy property in Turkey?
Saudis businessmen, investors, and ordinary citizens rush to buy property in Turkey for many reasons including:
- Countries relations are not limited to politics, that’s why when we talk about relations between Saudi Arabia and Turkey we have to think about other matters most importantly of which are economic relations, where Turkey-Saudi trade exchanges, have exceeded the annual volume, by more than 8 billion US dollars, with goals to reach 10 billion dollars within the vision of Turkey 2023, which Ankara and Riyadh largely agree with
- Saudi Arabia found in Turkey an alternative to the Middle East market, which is witnessing a collapse after the other for several reasons, related to the security and economic aspect in some Arab countries such as Egypt and Lebanon, and therefore Turkey, which is geographically close to Saudi Arabia, has become a haven for real estate investment.
- The significant growth in the Turkish economy, which is moving steadily to reserve its position within the club of the ten largest, and Turkey's superior ability to deal with transitional crises such as the collapse of the currency in 2018 and control the spread of the Corona pandemic, all of this have encouraged Saudis to head towards Turkey.
- Over the past ten years, Turkey has launched a package of real estate legislation that greatly facilitated the ownership of foreigners in Turkey, especially the reciprocity law in 2012, which was considered a real estate revolution, followed by obtaining Turkish citizenship by owning a property and then reducing the value of the real estate investment appropriate for "obtaining the Turkish passport" to 250 thousand dollars instead of one million dollars.
- The big incentives provided by successive Turkish governments to foreign investors who want to buy property in Turkey, such as reducing tax fees, granting real estate residence to the owner of the property and members of his family, large discounts in property prices in Turkey, government guarantee for real estate projects, pricing the property in Turkey in Turkish liras, which benefits the foreigner when doing currency exchange
- Huge urban plans in Turkey similar to the strong infrastructure and major vital installations like Istanbul's third airport, Water Canal and the Valley of life
- The availability of many promising real estate areas in Turkey, in which many Saudis bought properties and had a very successful investing experiences
Most Saudi investors in Turkey have found a safe place for their capital away from exchange rate fluctuations.